China Won’t Have Large Stimulus This Year, Finance Minister Says

Chinese Finance Minister Lou Jiwei
said the nation won’t use “large-scale fiscal stimulus”
measures this year, adding to signals that the government will
tolerate a slowdown in the economy.

China will promote growth and boost employment while fine-tuning policies and keeping the fiscal deficit unchanged, and
will also avoid big adjustments to short-term macroeconomic
policies, Lou said in July 11 comments in meetings with U.S.
officials in Washington. The remarks were posted yesterday on
the Finance Ministry’s website.

Premier Li Keqiang said this month that the nation should
keep restructuring the economy as long as growth and employment
stay above unspecified limits, even as a second-quarter slowdown
in expansion increased risks that China will miss its 7.5
percent goal for the year. The government responded to the
global financial crisis in 2008 with a 4 trillion yuan ($586
billion at the time) stimulus and a wave of bank lending.

Lou said in a press briefing at the Washington meetings
last week that growth as low as 6.5 percent may be tolerable in
the future. While the government in March set a 2013 growth goal
of 7.5 percent, Lou said he’s confident 7 percent can be
achieved this year.

The official Xinhua News Agency later amended its English-language report on Lou to say there’s no doubt that China can
achieve this year’s growth target of 7.5 percent.